it's monday august 17th, 2020. squawk box begins right now. and good morning welcome to squawk box on cnbc. becky and andrew are off this morning. joe, it's good to see you and be

with you. >> really? >> the judge how are you? >> are you said -- what have you got? do you have like chambers there or like, what are you equipped to do if push comes to shove today. you have -- what do you have at home what have you got. and report on what we report on. >> am i the only one. >> i filled in i filled in recently for a full week and they didn't play the theme music a single time. hopefully they can make up for it today >> we didn't hear about it we started having fun.

we nip that in the bud pretty quickly. >> oh, this is you. >> i'm sorry >> this is you. >> so you got that going. >> i'm glad i got up this morning. let's take a look at equity futures. we try to get a new record on the s&p 500. we'll see what we can get over the top there. treasury yields on the rise as of late. 25% last week alone. there's the ten year not doing too much not all that long ago. we have seen rates starting

there and stocks have been on the move we'll see that new record on the s&p this morning. >> the amount of money we're sprinting, i don't think it's a bad thing if we get yields up a little bit and maybe protect the green back a little anyway, on this week's squawk planner we'll get a couple of key data points. it's a busy week of retail earnings when you hear from walmart, home depot, lowe's and tjx among others a closer look now at the global markets. >> good morning to you it's good to see you on squawk box. let's focus on the asian data for a moment

we have japanese gdp numbers for the second quarter down 7.8% that annualized down more than 27%. so the nikkei is weaker through the session. the fastest rate in record there but the stand out positive was the chinese markets here we got a rally the chinese central banks injectingly quiddity by rolling over loans to the tune of about $100 billion to financial institutions we had some weak numbers trimming it's outlook on a 43% drop in half year profit but it didn't take the gloss of the stimulus helping the chinese markets higher what about europe. or the european market

they didn't get some support and the argument being that we'll see increased demand for metals and other commodities as they come out of covid. meanwhile we in europe have rising infection clusters at the moment and that is hurting sentiment. they saw 3,000 cases spain we're seeing about 5,500 cases on friday. and it's expected to grow again over coming days here which means germany has issued a fresh travel warning and that is on the travel stocks it's not only travel stocks but it's hotel companies and package holiday companies. the main victims of this sell off and dog whistle training i guess when we see the covid

numbers drop people back into them right now. we see rising cases in europe and people deciding that is a good excuse to share some of the gains we may have seen in the travel and leisure sector. back to you guys >> meantime, house speaker nancy pelosi is calling the house back into sessions over tensions at the u.s. postal service. yesterday the postal service said it would postpone the removal of blue mailboxes until mid november because of customer

concerns this is something playing out right before our eyes. here's that statement. the postal service is election central. is that okay with anybody -- okay all right. we'll see. i hope newman has not got a bunch of ballots in his closet not everyone knows what i'm talking about. remember newman on seinfeld opened his closet. he hadn't delivered mail for a month and a half. >> is that what you're worried about? >> newman. yeah, i'm worried about wayne knight having a bunch of ballots. i'm not saying which ballots not starting out there not going to do it not going there. anyway, let's go here. former mcdonald's ceo steve easterbrook filing a lawsuit from his previous employee the company accused him of

engaging in a sexual relationship with three employees and conspiring to keep those relationships secret who knew mcdonald's is seeking to force him to pay damages or strip him of compensation that he retained when he was fired. he says mcdonald's knew of the relationship with multiple employees when they offered him the separation agreement that allowed him to keep stock awards worth $37 million. >> that's a lot of extracurriculars going on. is it not? not every ceo. who knew looking at the guy. do you ever look at somebody and say i knew it. i knew it. i knew this was going on.

>> no. he's not george clooney. i'm not going to talk about people's looks or anything like that it's just unusual to just be all over the place like that we're both happily married far be it for us to be able to understand if you will something like that, right >> yeah. >> can i ask you a question. >> that's right. >> can i ask you a question about the nationals. >> go ahead. >> are you a fan >> modestly. i'm a dodgers fan. >> dodgers i bet yesterday put i took the under and it was 6-5 >> well that's a good bet. you must be loving it. >> draft king. >> well, yeah, look, we live in

nmg new jersey so we're able to place the bets which is good i don't know. >> yeah. >> i'm a nationals fan because i'm from the area but i'm really a dodgers fan because i grew up a dodgers fan. that's where my loyalties lie. >> i bet on them and bet against the reds just like pete rose. i don't know if he of did that. >> now you're never getting into the hall of fame you just admitted that >> he says he never did. i think that it came out later and i don't know i don't want to get in for a baseball player i grew up with charlie. for talent he was about right here.

>> you're treading very lightly. he's smart. >> i'm easing my way into it i'm easing my way into it. >> you don't know how far you want to go anyway, dow jones up about 18 points nasdaq up about 46 and s&p might get there. i think it's got about 8 more to go, 9 more to go when we come back, scott gotlieb with an update on the pandemic and later he'll give us his update on several issues including the phase one trade deal and ban on technique and a lot more squawk box coming today. hike!

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let's get an update on the pandemic and now cnbc contributors is on the board of pfizer and alumina. the latest op-ed in wall street journal is titled lifting lockdowns. and key to avoiding a recession. so it's something to talk about

and michael strahan of aei and certainly we can see how difficult this is going to be and it's been likened to a dimmer switch. you don't just flip the economy back on but i think the dimmer, given what we have seen with some economic data and certainly with the averages of stock market averages it looks like we're continuing to turn back on, doctor is that fair to say? >> well, i think that that's right. one of the economists. he went through the economic literature with looking at what the impact was of the shutdowns and the stay at home orders and what the rebound was when those orders were lifted most states are open for business there's select images that are closed and you can't open them there's seating in restaurants and things like that but by and large, most businesses restraining activity now is

consumers. consumers haven't boubsed back but we're also seeing indications that consumers are gaining more confidence and reengaging with the economy. we said this on the show, china was able to restart their economy because they were able to get them back into state owned factories. their consumers were going to work and not coming home and not going out at night or weekend as well and really dependent upon more confidence the virus is still circulating here >> so for the stimulus, what is se ens essential to get done. what is essential to your view. >> we need to remember

they're just going to bounce back and consumers are still going to stay away from these businesses the even if we get control of it, you're going to see activity and hospitality sectors. and how we support those businesses even if we don't see a second wave we just see a slow infection. even if we get back 60, 70, 80% of consumers, that's what it is showing right now, you still have a hole in the economy of 6% or 5%. it just doesn't come back. that's going to be hard to see a full rebound so you want to have support there to carry the economy through that challenge >> talked about immunity a few

times. it's not totally understood. but when you say antibodies for three months does that mean you only have immunity for three months. do you still have circumstance you lating cells that if your body saw the virus again the cells are there and make new neutralizing antibodies. without having the same severity and disease. can we hope for that doctor. >> isn't that you'll only have immunity for three months but you'll absolutely have immunity in three months. they really only study a three month window they found people couldn't get reinfected within three months and they updated their guidance saying that they would be exposed to the infection you can't get reinfected there's another study as well that showed that people previously had the infection and

we also now know that there's some immunity that's likely to be more enduring so even if you don't have certain antibodies you'll have other immune cells that will become reactivated there's a lot of speculation around cross reactive t-cells. and that's a result of other coronavirus infections they seem to be reactive that doesn't mean that they wouldn't prevent you from getting infected in all likelihood so picture around immunity is actually quite encouraging and what we're seeing is this like other coronaviruss and that you do develop a period of immunity and you're not going to get reinfected and hopefully they last long enough that if you get reinfected in the future you won't have as bad of an outcome. >> it's scott.

good to see you this morning can you discuss the significance of the new saliva test approved by the fda >> it's highly significant this is a test that is a saliva sample it's also plead guilty cross validated on just about every popular platform for doing testing. so it's easy to use. it's unlikely to be in limited supply because of shor tamgs in the -- of shortages in the testing supply chain it's much like a pregnancy test. and you drop liquid on to paper. you get a result in 10 to 15 minutes. and it's tens of millions of

pieces of paper a month. they can be rolled out in places like schools and allow testing at the point of care. i think we'll see a lot of these innovations in the next month come on very quickly you see a lot of them submitted and you see a lot of them talk about academic experts and manufacturers that have submitted it but just like the saliva tests all of this is going to happen all at once. it takes time to move this through the process. and it's what has been in short supply >> also see stories about infection rates of 17 and under

continuing to go up. can you just set the record straight on exactly where we stand. on younger people and infections >> a view that younger people are less likely to get infected. they're less likely to get symptomatic. they're probably just as likely to get infected but much less likely to have a bad outcome the data seems to suggest that and summer camps, schools, you're going to see more infection in the students. hopefully we're not going to see more symptomatic disease and step up to real outcome. they do seem less vulnerable but that doesn't mean no risk. you're still seeing bad outcomes

at a lower level than in older adults >> people that are asymptomatic and what is the parker what is it testing for. >> it is looking at the material from that itself that lets you extract it it requires a certain device. >> the end, when it's all said and done and it's the depressing part what is the total u.s. population that you still think somewhere between 30 and 50% will have seen this virus before there's a vaccine.

>> i think if we look at it we'll probably get to 30% by the end of the year based on the studies and the rate of infection. some of the modeling for good groups validated that. unless we see a real change in the trajectory of it >> it's going to be a pretty -- even if you put the lowest mortality rate, the most positive -- not positive but t you know, not the worst one, that's a big number. that's going to be a lot of deaths >> well, presumably more than people are going to be infected going forward are the ones that are less vulnerable. we can get down below .5 >> it looks like the big studies

and you figure around .8%. that's the infection mentality rate the case fatality rate looks like people have become symptomatic. that .8% likely to hold a lot of studies now. it will come down. >> it will come down it's declining we are doing a much better job and it should come down as we get into the winter. >> hopefully or something. thank you, scott it comes on halftime as well but bad news for you

i now that might happen. i knew that might happen anyway, thanks coming up big news over the weekend from berkshire we're going to talk about the moves in banks take a look at the biggest 'lbeig b wl.iners if youil wel rhtack. at leaf blowers. you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading

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the french health care company is buying the u.s. company for around $3.7 billion. they'll buy all the outstanding shares and the acquisition will advance the presence and research. >> i'm checking this out right now. because i don't know what you're doing this afternoon you'll be done by then 140. utah jazz.

the playoffs are here. nba playoffs are starting. both top seeds play tomorrow the milwaukee bucks buddy is you know those guys. that's at 1:30 the early game and then the l.a. lakers have a late game at 9:00 p.m.. can i ask you a question as long as you're here and i have a sports perpetrator -- so the nuggets are favored what difference does it make if you're playing at home there aren't crowds? maybe they're favored for different reasons. i'm just wondering how to play this this has nothing to do with it

>> i'm going to watch this game today. this is very enlightening for me because i mean, you cannot have a sports conversation without it having some sort of betting angle for yourself and you know, that's interesting. every sports conversation whether it's baseball now or now the nba playoffs do you look through the prism of -- >> let's say that you, let's say that you only like teams that you love like the reds, the bengals, i can't really say that let's say that you only like teams so that limits your interest when is the last time that you were interested in a major league baseball game except for the dodgers? and i'm telling you, if you got $10 on the game, scott, it's almost like, you know, i'll bac

you if you think you're any good at this. >> who do you like in the denver-utah game >> i'm going to pick the underdog probably and do a parlay and then you can get a big multiple they only need to win once in awhile >> i hear you. there i don't go. >> anyway. take us out of here. see you. >> you don't think the viewers like that conversation >> i think they do. >> coming up. >> i don't think management likes it

coming up, berkshire is making big and surprising moves that were just revealed in their sec filings. we have a complete run through coming up next take a look at u.s. equity futures. see if we can get that closing high we opened virtually flat s&p a few and then the nasdaq up 45 right back to squawk box as business moves forward, we're all changing the way things get done. like how we redefine collaboration... how we come up with new ways to serve our customers... and deliver our products. but no matter how things change, one thing never will... you can rely on the people and the network of at&t...

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they're a little bit flat but you can see the nasdaq powering ahead once again the s&p indicated up about 3. i think we need -- i think we need another ten or so to get to an all time high some big investments made big moves in the popular stocks. berkshire hathaway took a statement. maybe some of the stuff he liquidated it's sbinteresting. we never know whether buffet himself is hand picked and what can you tell us now. we'll get to the berkshire ones. this is about the latest round of regulatory disclosures.

this is a snapshot as of june 30th this is the hedge fund run by david tepper run by warren buffet took payments technology in a big way for a theme in the second quarter they started new stakes and vis sa mastercard and paypal and square now that entire industry has been emerging as one of the market recoveries has taken hold just as an example, it's about 30% since the march 23rd lows. it's worth $225 of market cap which makes it by the way more valuable than at&t and twice as valuable as ibm from a market capper spe cap perspective. buffet's shot made large

reductions cutting jp morgan chase holdings by 62% and also by the way, completely got out of its stake in goldman sachs. berkshire sold almost all of it's common stock in petroleum those shares falling 2% this morning. and then berkshire also took a new position like you mentioned. it was worth around $565 million at friday's closing price. that's one of the reasons why they're up around 9% it is a lot of money and it's not tichypically the size that see. i certainly understand the

rational, obviously, right. >> i mean, just in general >> i'm surprised. >> i mean, you could say this too. i'm wondering whether or not it's not typical >> how many hedge funds and mutual funds out there really did take full advantage of the silver and gold surge during the course of the second quarter and into what's happening right now. >> i don't think a lot of them did. we report on the moves a lot but i'm not sure how many people monetized it >> dom, do you remember the obama stimulus and it was shovel ready and the out rage at $800 million. >> i do. the arra. >> $800 billion. that's a rounding error today. that's a rounding error. don't even talk to me about this go ahead and spend that.

it used to be that icon fuse billions with millions now i ccon fuse trillions with billions that's how crazy it's gotten i keep talking about apple stories these days that's about the size of the physical stimulus that's going to be proposed out there it's just -- it's crazy to think about the size and scope of the numbers right now. >> good old days we bring up mike meyer and talk about it thanks. >> you got it. >> i had someone request an animal orchestra

it's a crazy stock market. >> i miss the animal orchestra hopefully it will make a return. maybe today. who knows. joe, thank you let's talk more about the market and investing with stocks near all time highs joining us now to the senior portfolio manager it takes stocks beyond that. >> it's more than fundamentals start revising estimates higher. and the numbers came in above the very low expectations. there is a belief that the economy can recover. obviously what's going on in washington right now is going to be very critical to that >> there's a lot of good news already baked in though right. >> there absolutely is i couldn't agree with you more

so we don't have what 22, 23 times forward. we don't have a lot of room for disappointment luckily last week some of the more consumer facing numbers, the retail numbers with an 8% year over year increase. it will be very important. a large chunk of the gdp it's good to see the numbers come in reasonably well. >> it's gotten new life if you will but it's been so many times ahead that i think it's a show me story at this point how do your moves in the market reflect your view there. >> you are correct and you have seen that a couple of times already the past couple of months you still have a significant gap in terms of earnings expectations and we have taken

money off the table and materials in energy earlier. and neutralize the positions before we would act more we'd like to see more substantive evidence of recovery >> we need to see rates continue to move up a little bit if the value trade is going to work >> yes, you do the idea that everything is going to go back in some fashion is not going to be realistic we're waiting for some pick up in some numbers that are more cyclicly based >> we'll talk to you. >> thank you. >> all right thanks, guys

coming up retail resur yegencreh founder of one venture don't miss our interview with the white house trade director the status of the phase one u.s. china trade deal the price at 16. surging once again in the morning. this morning in premarket trading. pretty unbelvae. 'lbeig bk.iebl

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squoo grood morning to you, scott. forecasted to be higher because of a pandemic home improvement boom analysts i speak with say the real question will this be a record quarter they have a marleau and hitting all-time highs in the weeks before earnings for the first full quarter of this pandemic. home improvement has become a bit of an american pastime

75% say they plan to start a home improvement project this summer national association of home builders remarketing model index stands for 73 for q2 a sharp increase from q1 in march. they said they received more job requests as a result of july 19. that grew to 69% lowe's, more do it yourself. as we look ahead to earning, a key metric is home sales they reported 80% growth in q1 they expect that level to remain the same in q2 back over to you >> all right, frank. we appreciate it very much that's frank holland >> thank you this morning's retail ecommerce ventures is announcing the completed acquisition of

distressed sports brand models this is the third major retailer along with pure one and dress barn that the investor has scooped up in the midst of the pandemic he's buying distressed well known brick and mortar brands to turn them into hopefully successful eretail businesses. ty, this is a fascinating idea i like when things survive but, correct me if i'm wrong, looks like the brand is surviving in this case but not necessarily the work force or employees. dress barn you acquired its 9,000 employees. only 30 employees but the dress barn brand lives on. how do we -- my usual co-anchor usually asks the question, how are we supposed to think about that >> a couple things as we acquire these brands,

first off, a lot of these layoffs have already happened by the time we come in. dress barn was in a bankruptcy situation. we bought it directly from ascena modells, pier 1, this had already gone through a bankruptcy most of the employees were already let off. in the long term although we are ecommerce focused, we see opportunity to open back up brick and mortar stores. you have to get clarity on what's happening here with the pandemic, how long it's going to go we hope to bring back a work force. ecom is surviving. we can't even fathom how they stayed in business this long with the amount -- just home office, some of these brands we can run it with 20 or 30 good programmers where they might

have had 300, you know >> it's really amazing that you started this in november with no idea you've seen what a lot of stay-at-home stocks have done to be positioned in this environment so difficult for so many people. your business model seems like it was custom made to do well in this environment and you had no idea when you started, did you >> no idea would be -- it would be covid i started an ecommerce in 2001 i started way back when ge financial, ge capital. my business partner and i, dr. alex mayer started in '08. we've been preparing, but as the lenin goes, there's years where nothing happens and there's days where decades happened and i think that happened.

i think this was inevitable. we just jumped forward what the world would have looked like in 2028 you would have seen the same thing happen amazon's writing has been on the wall i started looking at acquisitions in 2013, '14, i looked at american apparel it was the prices were high so we've sat on purpose for the last three, four years we looked at barnes & noble. didn't like the math i mean, we liked the math but didn't have the margin and safety we wanted pre-covid we started to see the cracks in the industry be large enough that the crisis came down, i'm a big buffet fan all investing is three words, margin of safety we wanted that margin of safety. we've been looking at it for a while but we're scooping up -- we also bought linens and things and franklin mint from sequential we've bot a u.k. brand

we've bought seven. >> you're like a kid in a canty store, tai scott wapner wants to -- >> hey, tai, i have a quick question for you how do you know there's an ecommerce market for some of these brands if they haven't been successful in brick and mortar, it's not a given they will be successful. how do you get them to think modells versus niko or dick's sporting goods >> some of the brands we've acquired, pier 1 and dress barn had 9 figure ecom when we bought them modells was of all of the acquisitions had the least emphasis on ecome. i think it was around 5% of the total 500 million in revenue that's one, like you said, modells is app interesting on i.

it will be a little bit more challenging but we paid less we paid 31 million in an auction for pier 1 we're getting that embedded ecom traffic. in modells we paid 2.6 one thing, we're not public at this point we don't need to take -- we want to right size the business maybe they're not 500 million in revenue that modells can do and keep with dick's and so on we think there's a real market it's a 131-year-old brand. it has seven figure email lists. we look at the email list, text list and monthly business of the website. we do our due diligence a little bit differently. it's certainly a challenge like elon musk said, you get paid in proportion to the difficulty of the problems you solve. hopefully my business partner and i can solve a little bit of

it >> all right interesting. so you're going to think about going back into brick and mortar you've got a lot of quotes elon musk. but i think -- >> i like to read. >> lenin, i'm pretty sure that wasn't lenin i think it was george harrison >> that could be >> i think i don't think it was lenin anyway, tai, thank you someone is going to take me seriously, that i can always count on on twitter. that's fine. >> you know, joe, after doing that segment, i think the most shocking thing is $3.7 million, that's it, for a brand like modell's that tells you where the world is and how it's changed erov the last ten years we'll be right back. before money, people traded goods. tools, cattle, grain,

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good morning, the bulls look to continue their charge. tiktok under fire. they're looking at a u.s. ban on alibaba. how aboua 4,000% return on a hedge fund we'll see who achieved that as the second hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc

i'm joe kernen along with scott wapner andrew and becky are off today was that too much? you said let's rock, i said i thought maybe if we were going to rock, maybe it should have been paige and plant might have been -- do you remember them or is that before your time? >> no, i remember them it's a high bar. either way, right? it's better than if you say the bert and ernie that would have stunk. i'll go with either one of the examples you have. >> you mentioned elevator. i even mentioned tyler -- steven tyler and -- we'll go with any of them. hall and oats. >> i like hall and oats. >> u.s. equity futures, meh. 2 points on the dow, 3 points. nasdaq strong though, up about

46 go where no other s&p average has gone before. take a quick look at treasury yields this morning treasury, as we mentioned earlier, the 10-year under .7 of a percent. this is probably, i don't know, you watch them i think gold would be a good thing to check once in a while, too. the inverse of what we're seeing in the treasury. certainly related. >> gold, silver. so many of the metals have been on the rise. the question, joe, is where is the dollar going to go that will have a lot to say about where gold goes and the other commodity trades that have worked pretty well, right? >> i don't know if i'd -- i don't know if i'd get too negative on the dollar, you know what i mean? it's in relation to everything

else, right, scott when this is -- if this is ever all said and done, we'll probably have a pretty good economy at that point vis-a-vis the rest of the world but we'll see. it's never been a great thing to short the dollar for too long. with what the fed is doing and what congress is doing, sometimes you can't help but wonder about how stable the currency is going to be. >> yeah. king dollar. king dollar. making headlines, sanofi is buying a biotech principas novavax says it is starting the second phase of testing. the trial will take place in south africa it could enter a large final stage of testing by next month. the fda is giving yale's covid-19 saliva test used by the nba the emergency approval

labs will charge only $10 per sample you heard dr. gottleib talk about how quickly you could ramp it up, how cheap it is and how effective it could be. you mentioned nba. the playoffs start today a lot of people give alot of kudos to the nba commissioner with the bubble and the whole approach to playing under these very difficult circumstances and i'm excited about the day. i haven't decided yet what i'm going to do, scott i'm -- i've had people say denver, i've had people say utah i'm going to have to think about it i'm going to have to think about it a little. do you want me to let you know >> yes, i actually would now now i'm really intrigued i do want to know. >> okay. and an over and under, got to think about that you do the parlay, you get four and five times what you put

down did you see "uncut gems" i'm not like that. i'm not like that, but you've got to see t. adam sandler you should see it because he shows you what a parlay is i don't want to give it up in other headlines, shares of alibaba are under pressure this morning coming after president trump suggested at a news conference that he was considering a ban on china-owned companies other than tiktok. uber and lyft say they could end service in california as soon as this week as they fight an order requiring them to classify drivers as employees a judge gave them until august 20th to comply companies are pushing for a referendum in november that could exempt them from that law. scott? joe, thank you now to the trading week ahead. joining us now is stephanie link, hightower chief officer and jenny harrington is gillman hill asset ceo and portfolio

manager with us as well. both of course cnbc contributors familiar faces from the ha"the halftime report. >> good morning. >> stef, size up this week what's at steak. you hold a lot of the retail stocks that are reporting and that's going to drive the action this week. >> yes, it's going to be a very busy week. one last week of earnings, which is about 5% of the s&p 500 the important part of it, it's going to be a tell on the consumer there are haves and have nots. do it yourself are beneficiaries of stay at home. the problem is the stocks are up so much and they're not exactly cheap. watching to see the reaction there. walmart and target have moves. it's going to be a big focus of supply chain going to be a very big discussion of both companies you have the have nots, off

pricers and target stores. after this week, you're back to the macro. we're going to slosh around a little bit after this week because we're going to be hearing more about the fiscal debate, more about elections and watching economic data to see if the momentum that we've been seeing can continue. >> yeah. jenny, maybe you'll get more clues as to whether the value trade, cyclical trade is for real depending on what these companies not only report for the past, but what they talk about for the futures. >> right i think when i look at this, i don't think there are going to be any reporting surprises coming up. i think we'll know what it looks like for home depot versus ross stores even that i don't think is going to be terribly surprising. you know in the long term home depot is great ross stores are great. we know elle brands has challenges ahead i don't think the value trade or the have notes or the other 490

or however you want to characterize it, that will be interesting. the distinction with the retailers but what we've seen in the last few weeks is seeing a broadening of strength an who's starting to perform well i'd like to see that and i expect it to continue this week. >> stef, what do you do with the banks. we got the 13f from buffet and he said he was selling down most of the stakes that he had in the banks although we know he's been adding on an almost daily basis for a period of time in names like bank of america >> i knew you were going to ask me about the banks >> they will recover and the economic momentum will continue because we have so much fiscal and monetary policy in place

i think the banks can do well and that yields should gradually increase i don't think they're going to run away from us, so that's why you want to be selective what i've done is i'm doing special situations for it. i do own wells fargo they have been incredible. six new hires in the executive suite. you have to have patience. i like morgan stanley. i thought they had the best second quarter of all of the big banks. then i know that a lot of people like master card and visa. i'm going to take american express. the stock is down 19% on the year i think travel and entertainment will come back and the valuation is really reflecting a lot of bad news very good balance sheets i'm going to be selective and pick my stocks with special

situations >> it's the same way, jenny. so many things are still current. whether it's paypal, square, visa, master card. it's kind of a play on what's working now. at least towards the end of this, the buyers and looking forward to a vaccine >> wells fargo, i love that we have three opinions here we have warren buffet who sold it we havestaff who added it. david tepper who added it. that's what makes market it didn't make sense for us. there wasn't enough for a cash flow generation or yield flow. there is something for everybody. i think you're right on david tepper's call on the payment processors we also like staff owned american express for the same kind of logic which is as this

market comes back, as behavior returns to normal, american express should be a beneficiary. the payment processors -- stepping aside we've looked at the portfolio and market and we've tried to cover it up into five categories of things that are long term unaffected, long term worse, long-term better, et cetera. the payment processors are long-term better for this. they were never -- they've increased their trajectory and that will never decline. it's exciting and encouraging to see. even some of the multiples even if the big multiples, i can justify owning those i don't, but i could >> stef, you know, what about disney i bring it up because, you know, you find out -- we discussed on our program last week that dan loan, now it's revealed in his 13f, now we're learning about disney with david tepper as

well i don't think you own disney anymore, right >> no. i sold it back in february at about 145. i thought it was priced to perfection at that time and a lot of people liked it a lot of people were raising targets, reiterating buys. it's a great company and great management team. they did a great job in the second quarter in ternls of cost flow and my issue is, it's a reopen stock i have plenty of reopen stocks as you very well know. i think they have a lot of challenges ahead i think disney+ has a lot of competition. i think they have to continue to invest aggressively. you won't see it on the bottom line as a result if you believe that the reopen is going to be successful, that's fine. i own others in terms of the visibility is better. >> i gotcha. i will see both of you on "the

half" i hope this week stephanie and jenny, have a great day. >> definitely. >> you, too. >> thanks. joe. thanks, scott. coming up, a new report on racial economic inequality all happening amid the covid crisis. first as we head to break, let's check some of this morning's other headlines. nvidia is in exclusive talks to buy chip maker arm the takeover of the soft bank backed company valued at 40 ayllion pounds or $50.4 billion. st tuned, you're watching "squawk box" on cnbc

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welcome back to "squawk box. a new study finds home depot with a 35% jump of daily foot traffic. the numbers come from unicast. it's featured in today's wall street journal the increase as consumers ramped up home projects good to see people are getting out. >> you're right. and improving things you can't imagine the amount of work i've done around here just

yesterday, unscrewed the light bulb >> wow >> finally got the right one to go in the right size it was a while but i finally was -- i don't know whether you're pretty handy like i am around the -- >> it sounds like you've made some big strides during the pandemic i'm happy to hear that. >> it's really bright. really bright in here. more serious topic coming up here, scott. the covid pandemic has hit some communities harder than others exacerbating communities. research from the hamilton project at brookings revealed that covid-19 is the third leading cause of death for black americans and that disproportionate health impact has serious health complications. former mayor of baltimore and panelist at the hamilton

project, stephanie blake can i still call you mayor is that the conventional way >> either one. i answer to both when you come from a big family, you answer to just about anything. >> yeah. answer to -- when dinner's served obviously, all right. stephanie, thanks. >> there is the problem and then there's some solutions we've talked about this quite a bit. the disproportionate effect the pandemic has had on the minority community. can you outline what the biggest problems are in terms of why it's happening there and what are the best ways you think for society to address this. >> i think this pandemic has laid bear what many in the

health circles and government circles have known there's gross disparities in health there's a health disparate -- when i was mayor we did a very comprehensive life expectancy health assessment for the entire city and the life expectancy from one zip code to the next was as far as 20 years difference in life expectancy. that is astonishing. so when you think about all of the people, the minorities, blacks, people of color, people who are vulnerable economically, working on the front lines, those are the same people that are having the health challenges so health disparities is a big issue and the income inequality has also impacted minority families disproportionately. >> food insecurity, it seems like that would be one of the

first things that we should -- it doesn't seem -- obviously, you know, it's going to take funds, it's going to take resources, but it seems like that's what we need to take care of first in a situation like this. >> one of the big detriments or obstacles we found was the food deserts. i was the first mayor to hire a food czar that really worked on food policy. we saw that about 20, 25% of the children in our city were living in food deserts, and that is a big problem. we also know that many families depend on school for their children's meals that's why we had such a robust program for meals during the summer, so there's so many challenges that the social safety net for so many families, it's become very weak because of

this pandemic. that's why it is important for us to get a handle on it and so i'm excited it's convention week i'm excited to see what vice president biden and senator harris have in store because they understand how important it is to take real responsibility for this economy and make sure our citizens are safe and healthy. >> stephanie, minority businesses are more affected as well, more severely affected by the pandemic studies have shown. that seems like a long-term fix that we're looking for there whether it's seed capital, easier access to loans, banks that might be more open to funding. is that part of your thinking as well >> absolutely. you've really outlined all of the -- many of the on stack

thals minority businesses face many face difficulty dealing with traditional banks many don't have the resources that others, the majority of companies have access to wealth outside where most people have access to their home, credit cards. when you start from behind and you have something like the pandemic that has made every business -- well, just about every business weaker, you really have a disproportionate impact on minority communities >> we talked with the harlem children's zone a lot, stephanie, on this show. it all comes down to really -- it's going to take a lot it's going to take a cradle to job approach in a lot of neighborhoods, which includes education, after school, child care, all these different things it just -- watching it all

during the covid crisis just makes it more front and center for what needs to be done even after the crisis is over are you familiar with the work being done there are you -- >> absolutely. >> -- is that something that can be done in detroit, in oakland can it be done at scale in a lot of different cities? >> i definitely believe it can be done at scale they have taken a look at that model and taken various parts of it to try to create a continuum of development for our young people to prepare them for life. and i definitely think it is something that we should look at i think when government, when business, when communities, when civic organization, volunteer organizations come together with one accord and takes a look at the resources we have as a community and work with intention to create some pathways for our young people, i think that the sky is the limit

but we have to get on the same page and we have to engage the people that we serve in a meaningful way >> very good thank you. we appreciate your time this morning, mayor we hope to see you again update on the progress being made we'll have you back. >> would love to thank you. >> okay. scott. all right, joe thank you. coming up, we're going to tell you about a hedge fund manager who's turning in a 4,000% return that's 4,000% return amid the pandemic. first, as we head to break, check out gold prices. just below $2,000 an ounce now looks to get a little bit of a lift today stay tuned, you're watching "squawk box" here on cnbc. you should be mad at forced camaraderie.

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incredible investing story to tell you about. a hedge fund manager generating returns of more than $4,000% which included the pandemic selloff. leslie picker is telling us who did it and, leslie, how. >> that's right. the firm is universa it made investors more than 40 times their amount that's 4,144% net return on capital. it's tail risk hedging it's a big doomsday bet. it's a cocktail of algorithmic investing. you can imagine how the

volatility earlier catapulted their returns to the stratosphere unive universa with $6 billion in assets gave back some. helpers unwound the strategy in january citing high costs associated with little benefit and chose instead the conventional tactic of diver diversification for risk mitigation reports show california's bailout had a payout is tail risk hedging still necessary? we'll ask that question and more when we speak with the founder and cio mark spitznagel. his first tv interview since posting those 4,000% returns, guys >> with a market, leslie, back towards new highs and, you know, a lack of volatility, you

obviously raise the issue of whether that strategy -- not whether or not it's necessary, more so whether it would work. >> right what the return profile would look like. they would argue this is the perfect time to check if things look frothier. that's in the eye of the investor as to what comes next interestingly enough, a source close told me universa has posted it every year since the inception. clearly will there are a rising concern and subsequently the long bull market that followed they think an option strategy that is systematically based and so they deal with something

called convexity where they try to capture significant up side even for little protection cost. so it's pretty interesting we'll be sure to ask him about that at 10 a.m. >> yeah. we'll be looking forward to that interview. leslie picker, thank you very much >> got to be in the top quintile you would think. finally a hedge fund that might justify the fees i can lose money myself and i could probably -- i've seen a lot of the performance of some of the hedge funds i know i could lose that much easily and not pay 10 and 20, whatever the hell it is. good to see there might be one worth -- no guarantee of future success. still to come on "squawk box," 2020 presidential election kicks into overdrive this week what the democratic national convention, we'll talk about what investors should know is

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welcome back to "squawk box" this morning take a look at futures how the day is shaping up. look at ibm.

there's the futures board. pretty flat. dow flat s&p 500 up closing high 3386.15 we've got our eyes certainly tuned to that. technology looks like it's going to have a pretty decent day. we've showed you ibm ibm announcing a new data center processor that can handle triple the load by its predecessor. samsung has been tapped to produce the new chip joe. >> thanks, scott coming up, arthur brooks on capitalism, the election and what investors should know we're going to see the dnt, democratic national convention it's virtual but it's coming you can watch us live on the go on the cnbc app. we're coming right back.

welcome back to "squawk box. futures, s&p is going for a new closing high today we have been fluctuating a little bit you can see we would open higher across the board news breaking on huawei. reuters is reporting the trump administration will further tighten restrictions on the chinese company. that report says they will move to prevent huawei from obtaining semiconductors without a special license. firms developed or produced without software and reports say it's used to prevent huawei from circumventing export controls. new report, new action

joe, we've got peter navarro coming up before the end of the program. another thing to talk to him about. >> i know. red meat let's see what he says he always comes loaded, doesn't he loaded for bear. something to look forward to have you got your questions ready for him? >> i do. there's a lot to talk to him about. no kidding did you know this was happening this week? it's i'm going to ask arthur about this the democratic national convention kicks off tonight with vermont senator bernie sanders and first lady michelle obama. for a look at what to expect on jobs, economy and taxes. arthur brooks, aei president emeritus professor with harvard kennedy school, contributor for "the

atlantic" and the book "the art of happiness." >> i'm always happy to be with you, joe i can't see you right now, but i can imagine you and that makes me happy >> that's awesome. let's start with just the way this is going to be presented virtually. >> right. >> how is that different from previous conventions not going to be quite as easy to get all fired up, is it? watching this virtually. it's almost like the sporting events they pipe in -- when someone hits a home run, they pipe in music. wow, this is great maybe they need to pipe something in, maybe a laugh track -- no, no, no. >> it's like the way i'm doing my lectures at harvard i'm hoping for the best in a way. it's hard to co-create the atmosphere when there's no

audience we're all getting used to it what's it like doing the show when you don't have the community around you it's very different. it's a very different discipline, isn't it >> yes let's get to the actual substance of what's happening. so do you put bernie on first to get him out of the way this isn't really what we want to do, relax we're not going here or do you put him on first because this is the heart and soul of the democratic party at this point what's going on there? >> they put him on first because a lot of people wanted him to be the democratic nominee they want to keep those people around they don't want them all to split. they want to make sure they understand bernie sanders has a real voice in this deal. he's important enough he's going to kick this thing off with a fire and brim stone speech about fairness, capitalism and all of the stuff you and i know and love. >> arthur, we saw what happened.

we're not stupid when it looked like he was going to be the nominee joe biden was left for -- he was nowhere until that comeback that he had and the reason was people looked and said, oh, my god, we might run bernie sanders why even pretend to embrace that extreme ideology. >> they're trying to have their cake and eat it too m this is a typical thing in politics republicans would do the same thing. they saw jeremy corbyn take over the labor party and they saw donald trump take over the republican party four years earlier with the results that they didn't like either. the result was, let's try to continue to be mainstream but let's keep trying to keep the people who like bernie sanders around this is their attempt to do it the empirical question is, does it work? who knows. >> as the week goes on, i'm just

interested in how each speaker threads that needle between wanting to bring this economy back and wanting, you know, to be compassion natd, you always hear from -- that we're going to have a lot more government i don't know which party is which. a lot more social spending in the case of democrats. i'm not sure that it always gets to where it's intended what are we going to see are we going to see a fiscally responsible democratic party just a huge give away for college and, you know, health care for all how are they going to walk that line >> tons of promises. tons nobody gets up in the convention and says i'm not going to do stuff, i'm going to sit here they get up and make all kinds

of crazy promises at convention. that's what the convention is about. they're going to start off and talk about how if you elect joe biden president of the united states the covid is going to be called manageable, managed, labor markets will come back just elect this guy and the covid problem will recede dramatically go back to the old fairness. that's going to come back in a big way. there are going to be a million promises for the expansion of the welfare state of social welfare benefits in america today. people are going to have to decide, are these things believable are they affordable? is this the country that we actually want? and that's going to be the big question >> we had a rough three days in new york city again in terms of gun violence and other things. how do they -- i mean, they can, i guess, fall back on gun

legislation in the midst of a lot of what we're seeing in terms of rising crime rates, whatever you want to attribute it to. how do they approach the whole law and order, police issue that's been -- i don't see it on all the networks >> they don't talk about the violence per se unless it involves the correct narrative politics are to the right and left you cherry pick the narrative you want as opposed to reporting the news as it is, which is a big problem. both parties are in crisis right now, joe, you and i both know this the only time we're going to get back fair and square to what the country needs is when we get back to the ethos of american self-improvement it's personal entrepreneur

unusual sh ship. we're looking for ourselves. neither party is talking about this populism on the right. populism on the left bat this back and forth. when the parties actually compete, they make a better environment so every single person watching, rich, middle class and poor can lift themselves back up, that's going to be the aspirational inspiring america people want to get behind right now we're not there. we're going to have the give away contest in the political conventions. it's not going to inspire me too much i don't know about you. >> no. i don't know i don't know where we are. i look around sometimes and i'm wondering, arthur. i'm trying to love everyone. that's your thing. what is your thing, love every -- how does that work? >> matthew 5:44, love your enemies. very practical message nobody has been insulted into

agreement. insult the other guys when they're not there, right make sure you're insulting them not in their presence so you can lock down on the people through fear and hatred on your own side that's the reason why he has a personal empowerment is the only message that can endure. >> it's been a rough year. >> you know what, joe, it's going to get better. it's going to get better it absolutely is going to get better. >> you don't know that. >> i do know that. >> that light at the end of the tunnel might be a huge train headed right for us. >> yeah, but you know historically speaking, it's actually these crucibles that make americans wake up and say, what is the country we want to be it is not a country where we hate our neighbor because he votes republican or she votes democrat 94% of americans hate how divided we've come and we're going to turn on the populus

republicans and we'll go and lift people up that's the reason people like to watch this show, is because it's about a entrepreneurial america that has a future. fundamentally, that's why this is an inspirational show to watch. this is about the startup life and country. >> thank you >> you as well i know things are definitely going to be better for you we have the halftime report. scott, we have that to look forward to would you like to talk to arthur scott? >> yeah. will you just -- you were just listening and taking it all in with arthur, right >> i was i was wondering how long -- i was wondering how long it was

going to be before they turned that sound around about why squawk was such a great program. you need to run that again coming in from a break it is inspirational, aspirational isn't that what we try to do around here? >> watch when we go to break i think it's pretty. >> maybe the 8:00 hour all right. >> i know how max myers opera s operates >> news this morning that the trump administration will first tighten restrictions on china's huawei check out this morning's biggest nasdaq >> stay tuned, you're watching squiek box on cnbc

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apple facing concerns about abuse in its power joanna stern is joining us and a cnbc contributor and will powers, senior research analyst at baird joanna, apple goes to the hill tim cook largely stays out of the cross hairs. it's all the focus on others

>> now we're understanding why tim cook was sitting there if you think back to two or three weeks ago, the other ceos, jeff bezos, mark zuckerberg and sundar had less than that, half of that. the focus was on the app store i don't think the regulators and lawmakers had really grilled him enough there about how this could harm consumers now with this ep peck battle we're see how this is affecting consumers and how the cost has been passed on to consumers. >> what do you think is possible as a result of this? >> bad pr for a $2 trillion company or trillion dollar company. depends on the day at this point i think it's a marketing issue amongst younger users, people who love these

games. a lot of this is around gaming right now this is about epic and fortnite, but last week we saw apple is saying these new cloud gaming services, stadia, apple can't review each game apple can't make money off of each game. at the center of this is gaming right now, but really this is a much larger issue with lots of app developers from the smallest ones to the biggest ones, amazon, tinder pushing back against apple and the abusive or the overpowering laws or financial gain that they get from the app store >> so, will, bad pr. a marketing issue. that's how joanna describes it is there any stock risk as a result of that >> well, look, sure, scott there are puts and takes to the argument here. no question apple is one of the

dominant mobile platforms. there are a number of subscribers out there. services has been a laser focus area for investors it's up 20% of revenue 15% this last quarter. the app store's camp does that it's important to step back and remember the reason developers want to come to the apple ecosystem, because they know it's the best mousetrap out there. they put resources at risk to develop a platform that attracted developers in the first place. >> yeah. it's a great point the question is who needs who more i think that's really the question here. >> yeah. >> scott -- >> go ahead, will. >> there's interesting

historical context when you step back if you look at the period pre-iphone, you go back to 2005, 2006, the gate keepers at that point were the wireless carriers it was at&t, verizon, sprint at that point and all of the carriers globally. they collected the so-called toll fees of might have been 30 to 50% so when apple entered the market, scott, that actually looked pretty good on top of that, the developers had to negotiate separately with all of the carriers on a global basis. when you step back, apple brought the market a disruptive product. >> thanks so much. >> i can remember farther back than that. i'm dating myself. we sold software through boxes and tim cook makes that argument as well. >> guys. joanna, will, thanks to you so much. >> thanks, scott coming up the top corporate

headlines. stock movers, both market guidance from well respected technician katie stockton. you're watching "squawk box" on cnbc ♪ ♪ ♪

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good morning a big week for the markets begins right now we have a slew of retail earnings where we'll hear about joe biden's thoughts nancy pelosi is calling lawmakers back to the white house. and is it american ban on

alibaba the next front in the u.s. tech war with china the trump administration trade advisor peter navarro talking about news just out of tightened restrictions on huawei the final hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc. i'm joe kernen along with scott wapner becky and andrew are off today still on record watch this morning for the s&p 500. u.s. equity futures indicated up kind of mixed. up a little bit on the dow down a little. been around the flat lines most of the morning we are seeing the possibility of the s&p opening higher this morning. whether we get to those new

highs, we won't know immediately. we'll see. nasdaq is strong treasury yields just below .7 of a percent. easy to say it, scott. news just breaking on huawei the commerce department will move to have a special license leading up to thursday when they accept the party's nomination and the coronavirus will make the convention and it's all virtual.

senator bernie sanders republican, john kasich and former first lady michelle obama. gold is new investment for warren buffet's half file. it's risen 23% since the start of the second quarter. 13 f also revealed cuts to its stakes in wells fargo and j.p. morgan chase as well as a complete exit french pharmaceutical giant sanofi had the u.s. biotech firm four that and that post represents a premium allergy related diseases

markets and drama in d.c. were two biggest stories this morning. ylan mui joins us to talk about the postal service and mail-in ballots. good morning to you. >> reporter: good morning, scott. the postal service has become the center of controversy in washington because of the election corporate america is worried, too, because the u.s. mail is so important to the economy that much became clear during the pandemic when we saw the volume of shipping and packages jumping 53.6% in the third quarter as we began buying everything online. marketing mail is down 37.2% first class mail jumped 6.4% sending the post office into an even deeper financial hole major companies, amazon, ebay, etsy and cvs calling on congress

to authorize $25 billion of emergency funding to help stabilize the post office. cuts in service were threatening america's smallest businesses. 70% of micro businesses say they use the post office according to an internal survey and they spend an average of $359 a month on shipping. just last week the post office said it's going to have to hike the prices of commercial packages ahead of the holiday season those increases will be between 5 and 6% to 13%. house speaker nancy pelosi will call lawmakers back to vote on a bill that would force the postal service to maintain the operations to the level back in january. that doesn't do anything to stop these price increases or to increase funding for the postal service. guys, back over to you >> i don't know what to do there. just in general over the years,

ylan, about the post -- you can't -- i guess you can't price it where the free market would price it always has to be subsidized. nagging problem year after year. needs some government assistance i don't think it's going to get any easier with all of the competition and everything else. i don't know do you have a solution for me? long term? >> i don't have a solution for you, joe, but i will say the solution that the post office has asked for is even more money. i mean, $25 billion democrats put into the heroes act is not as much as they've said it would need they've asked for 25 billion in emergency funding and loans and 25 billion to help modernize operations as you said, this is a long term systemic problem that has become exacerbated by the pandemic. what do you do to stabilize the current situation?

that is what lawmakers are facing now. >> all right ylan, thank you. appreciate t. we're probably talking -- not going to be over when we're talking about this next year, i'm sure. thanks let's get over to dom chu and key stocks hey, dom. >> joe, let's kick off the morning movers with shares of . jd.com the chinese company posted better than expected revenues. there was a jump in active mobile customers they saw a 40% rise of mobile customers in june versus the same last june next up shares of nvidia which are close to 2%, 75,000 shares of prechip volume. they're in talks to buy arm holdings according to a report from the u.k.'s evening standard they cited sources familiar.

arm is backed by softbank and separately susquehanna boosted the target price to 540 bucks a share. then there are shares of general motors which are higher by 1.5%. roughly 60,000 shares of volume. the automaker gets a short-term buy recommendation from analysts in deutsch bank. they cited a market under appreciation of the possibility that gm can spin off the electrical vehicle unit. by the way, barrick gold, newmont gold, kinross, some of the names out there higher with sympathy with an investment in barrick gold

i'll send things back to you >> franco what >> franco-nevada. >> nevada. nevada >> you and i had this conversation. >> i'm going to say nevada. >> it didn't sink in i'm going to say nevada just for you. >> okay. it's not just for me, it's for nevada it's for the people that live in the state call nevada. thank you. >> thank you good, because that's how you say it joining us now to talk about the market technicals are telling us, katie stockton founder and managing partner of fairlead strategies. i read the first line here, katie, i was excited you say a technical market breakout of the s&p, which we're all watching today because we don't have that far to go, would signal a new long-term up side target of 3775 on the s&p based on a measured move that's about the last positive

thing you said in the notes. everything else scares me. so we're over bought from a lot of different metrics can you go over a lot of that? and if we do at this point, we're at the ultimate resistance of the old high, which is something in and of itself you say a 5% pull back based on exhausting -- the breadth looks exhausting and also just the percentage bullishness makes it look like there's going to be a pause in the meantime? >> right we have to differentiate between short and long term here the long term of that 3775 assuming we ultimately get a breakout, that's very promising momentum it is positive across all time horizons we do have up side exhaustion to suggest even if we reach new highs this week, which is likely based on the s&p 500 and not proximity of 3394, that we'll

see a pull back before the breakout is made decisive. for me decisive means two weekly closes above we can design that to future up side however, sentiment as you mentioned is such that it's overly bullish or extremely greedy now this is the first time based on that great index that mike santoli likes so much since january. that's a meaningful number it's tending to lead peaks in the s&p 500. based on the support of the s&p 500, pull back is 5 to 10% range would be likely on back end that type of sentiment. and breadth is overbought. >> you know how long that would take or how sharp the break would be, and i can think of, you know, we all get the fundamental reasons why

something happens, i can think of a lot of things coinciding with why the market might sell off. would you it shake out the complacency? if so, it will be quick and scary. >> i think so. bull markets are fast and furious and they shake out that sentiment quickly. it's good and bad news what it tells us is we should continue hedging into additional strength one metric is viewers at home can watch very easily is the vix or cboe volatility index i'm looking at it in a 20 day moving average if we see the vix get above that level, that to me sort of is a risk metric for the s&p 500 which is inversely correlated and would be a reason to hedge exposure with a time frame of, say, 2 to 4 weeks. >> how about the rotation of

growth to value? does this work how would you position it? >> it's often fleeting and i don't think this time is any different. in early may to june we saw value stocks out perform as of early july we saw value stocks outperform. we've seen that from small cap stocks which have value exposure we do have signs of short-term exhaustion or benchmarks like the pure value index, like the russell 2,000 index that support a pull back here in the coming weeks so i think we don't want to chase these small caps, chase the value stocks expect they're going to resume long-term trend of under performance versus growth. it becomes a bit more correlated i am looking for growth to outperform from the long term. >> how about quickly gold and the ten year interest rates,

anything significant on the horizon? >> yeah. they've broken out big long-term breakouts. signs of short-term exhaustion in gold and silver i'd be looking for buying opportunities there. i think you'll see that in the next week or so on treasury yields we have seeing some there. they do face resistance essentially in line. >> katie stockton, we appreciate it been a big help over the last year or so in watching these things you try to stay agnostic to the backdrop of all of this stuff. the market tells us what it's going to do. we can't tell it what we expect it to do we can but it doesn't work. >> you can try >> yeah, we can try. oh, we do. we do. watch the show

thank you. coming up, the covid-19 pandemic has made this summer anything but easy for the nation's airlines, but things could be about to get even more difficult. we'll explain why coming up. with the clock ticking on a potential u.s. tiktok ban, the president is looking at cutting ayf another piece. st tuned you're watching "squawk box" on cnbc some companies still have hr stuck between employees and their data. entering data. changing data. more and more sensitive, personal data. and it doesn't just drag hr down. it drags the entire business down -- with inefficiency, errors and waste. it's ridiculous. so ridiculous. with paycom, employees enter and manage their own data in a single,

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welcome back a mixed opening. nasdaq is strong

technology strong. record watch on the s&p. we'll see if we reach those levels when was it, scott april? that's not that far. that's not that long ago it may not be a v whampt do you call something that looks like that i don't know i'm going to look that up. my high school. xavier jim herman won that. he's a saint xavier alumni shout out to jim. >> i actually did see that i actually did see that. billy missed that putt at the end. >> yeah. >> broke away he wasn't expecting. yeah, i saw it. >> he's a real journey man, herman he's a bomber. awesome for anyone that went

there. >> all right let's talk about the airlines for a moment the airline industry about to enter a critical period. expecting to lock in the september schedules. phil lebeau joins us with more on that front. >> good morning, scott you're going to see september schedules locked in and the early plans are starting to be formulated american out on saturday night with the formal schedule for september. they are trimming it you see fewer people flying in september than august. they'll be down 359% on september from last year international remains dead in the water. here's the issue we have seen passenger levels plateau between 70 and 75% compared to the same time last year if you look at this chart, it's very clear that you are not

seeing the up tick that the airline industry is expecting. the big focus right now is whether or not there is a second c.a.r.e.s. act that is passed. the current guarantees for jobs end on september 30th. if there's another c.a.r.e.s. act, another 25 billion allocated to lock the jobs in place through the end of mash, th then it's a different story. planning for layoffs that will happen on october 1st. they've sent out the warn notices to all the union members. they know what they have to do come october 1st the question is whether or not that is averted with another 25 billion if they ever do a stimulus deal, when that happens. >> yeah. >> if one doesn't happen, phil, how much more do you think would service drop off >> oh, you'll see a pull back, especially in smaller cities american is laying in plans for cutting service to about 24, 25 small to medium-sized markets.

this is the interesting thing, scott. they want air service to their district if it's air service that's been there, they want to keep it there. that's the incentive for people in congress. let's come up 25 billion it's not just guaranteeing the jobs for all of the airline employees, it would lock in service that otherwise the airlines would say get rid of it american is not alone. the other airlines are saying, we're not making money flying these smaller routes we'll pull back. >> not surprised to hear that. phil, thank you. for more on the state of the airlines as we enter the critical weeks, seth kaplan is here how bad do you think it's going to get >> well, it's not even a question of what i think

we can look in that crystal ball industry wide domestic seats for september looking to be 52% of what they were a year earlier. the big news there is that for several months that had been increasing each month was a little better than the equivalent month a year later ever since the low point in may this finally is a reversal in that trend because they schedule less doesn't mean demand doesn't come back a little bit, but clearly they're not feeling too bullish. in terms of the stimulus, an interesting thing, too, to consider in some ways it's actually a bigger deal for the stronger airlines you would think that the weakest airlines of all would be counting the most at 25 billion. in some ways 25 billion net for the airlines, that's partly just kind of a pass through to their

employees. and some say, look, we're going to layoff a lot of people as you have an airline like southwest, delta trying everything they can to keep people employed. that means keeping people employed pro ducttivelily. >> the bottom line is, you're not going to get any meaningful return to service until there's a vaccine, right especially not -- why would you get it in september? this can't be surprising news to anybody. you have people going back to school and then anemic. >> improvement month

scheduled to be out. a new record chart the bill show. maybe things wouldn't be so bad. it's better than a sunday earlier. joe, it's kind of like what gottleib was talking about

>> people feel comfortable the business plan they sent you. bring everything along that is the problem. all right. thanks, scott. coming up, top white house trade advisor peter navarro joins us live with the government's latest move against huawei maybe a ban against alibaba. we'll also ask him about the much behind $700 million

government loan to kodak that's now under investigation. remember, we had the kodak chairman on that day after all the volume increase the previous week and he was like, yeah, well, it was the best kept secret really that's what you call a sreect? you're watching "squawk box" on cnbc at cdw we get that your it staff is beyond busy. they're on the job 24/7 so they sleep when they can. cdw services can help. our experts will design orchestrate and manage your most complex technology.

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> coming up, fresh manufacturing data out of new york and then peter navarro.

welcome back to "squawk box. rick santelli here live from cme hq with breaking news. august read on empire manufacturing in and around gotham expect a number between 14 and 16. disappointment here at 3.7 up 3.7 for the month of august that follows 17.2 which, of course, was the first positive number we had after we went negative in march. march, april, may and april, of course, the big minus 78.2 historic read. it is still a disappointing

number even though it has turned positive we've heard earlier the august builders at 78 tied the all-time high of 78 from 1998 both the series of numbers, empire and home builders index started in 1985. as we continue to monitor whether interest rates can do better higher as they did last week, they are already easing back a bit really i think one of the catalysts was a nasty 30 year bond option. yields have been moving higher for several weeks as the notion of real negative rates seems to have set in. at least for the moment they're drifting a little bit lower especially on the long end joe, back to you >> okay. rick, made my day. you said higher i think three times and you said empire. anyway fast-moving developments higher in the growing rif with china around technology. we got word a short time ago

that the trump administration will further tighten restrictions on chinese tech giant huawei the report says that the commerce department will move to prevent huawei without a license. the president said his administration was looking at banning chinese ecommerce giant alibaba following threats over the last few weeks to ban tiktok joining us is peter navarro, assistant to the president and director of white house trade and manufacturing policy you obviously have the president's ear on this, peter how much of this are you involved with in terms of the president's thinking and what's behind the latest idea for alibaba? >> hey, joe, good to see you healthy and safe here. look, this is a full interagency government support for this ban on huawei. got nothing to do with me,

everything to do with president donald j. trump being the toughest president on china, not just on the economy, cracking down on the trade practices, but also in the national security sphere as the president likes to call huawei, spy way. as you know, joe, this chinese company got its start by ripping off companies like nortel and others for their technology. it's like fruit of the poison intellectual property theft to begin with in both the software and hardware can burrow into our society, our economy, our businesses the president says that's not going to happen on his watch so just progressively we're rachetting down the pressure it was wilbur ross today doing his thing over at commerce so expect much more of this president defending this country against china, efforts to steal

our wealth and prosperity. >> so there were some ways around the previous things we did with huawei. this will help and they were still circumventing that this will help in terms of export controls and it won't -- no back door channels for huawei. >> it's a whole government thing whether it's the state department, commerce, cia, the department of defense. i mean, everybody is on board with this. i remember the famous cover with nixon, we're all kansians. in america, we're all china hawks now. for good reason. in the middle of this last decade they stole all our jobs using things like massive subsidies, intellectual property theft, hacking our computers now what they've done to us is basically infect this country with a deadly china virus that's killed over 160,000 americans,

cost us trillions of dollars in our wealth and really created some headwinds we're all china hawks now, joe >> but we're also still, i guess, like trying to live up to our end and china's living up to its end on the phase 1 the president was on another network saying china is more than living up to the trade deal in terms of corn, soybean and beef orders. i think that was on fox and friends earlier. so, i mean, is that more than living up to it? they're doing everything we've expected on the phase 1? you were on not too long ago and there was question whether phase 1 was going to continue. >> they're absolutely keeping their word so far on the purchases and, indeed, the chinese communist party bought epic amounts of corn, soybeans and buying more beef than ever before, pork

that's a really, really good thing, joe phase 1's on track the interesting news, i won't call it the bad news, is that it seems like the chinese communist party has forged a coalition with the democratic party and the mission now is to get donald trump out of office. the chinese obviously wants him out. the democratic party wants to take over the reins of power here's what's interesting to me. as we watch what's going to unfold this week at the democratic convention, you're going to see a big bet, joe, a big bet by the democratic party on one thing they're going to try to beat donald j. trump not on policy, simply on blaming him for the pandemic that's what you're going to hear all week donald j. trump, it's his fault. i'll tell you, there's only one president in the world who's responsible for killing over

160,000 americans and that's the unelected president of the chinese national party our task here is to basically focus on the mission my job is to make sure we have all the ppe, the therapeutics, the vaccines, all the manufacturing capacity bring our supply chain home and that's what we're focused on. we're going to -- we're basically going to just keep doing what we've been doing in terms of creating jobs for america, but it is interesting to me that all the dems want to do is blame the president. you never hear them talk about the chinese communist party infecting this country that should be happening but i predict it won't. >> hey, peter, scott wapner. good to see you this morning >> the judge how are you? >> i'm good, thank you it's good to see you do you want any chinese company to be able to operate in the united states? whether it's tiktok, wechat --

>> isn't that a provocative question to hit me -- go ahead >> let me finish. >> i don't know where you go from there. >> will you move -- will you move -- will you move to delist -- will you move to delist chinese companies from exchanges. is that the next step? >> you know why i'm here after almost four years? because i know i'm not the president. those are the kind of questions for the president, for the interagency. i'm just the guy who spends most of his time now, ironically, trying to save lives in america by standing up production for things like swabs, masks, and all of that stuff. so that's not a question that i really can answer. that's a question for this whole of government. i go back to assessing china as a threat. >> at the beginning -- forgive me for interrupting you. at the beginning of the interview the way joe introduced

you is you have the president's ear. are you actively trying to convince the president or others that that would be the next step is to try and delist companies and prevent chinese ipos. >> the other reason why i'm still here, scott, is because what happens in the oval stays in the oval and whatever i do or do not say to the president in conversations certainly is not going to be restated here so let's be clear about that. in terms of the conversation we have today, clearly we have china. they came to the table they signed a phase 1 deal they're abiding by the deal. at the same time they're clearly biding their time waiting for the election hoping joe biden will get elected i don't know if you've heard of the wumao army, but one of the things that's going on is the

chinese communist party is wagging informational army the wumao army is millions of chinese that get paid to troll our internet and push antitrump messages, pro biden messages i looked at what's going on here with our democracy it's the scariest as i've ever seen it's become a tool like the chinese communist party to influence what's going on here as the president loves to say, let's see what happens in november in the meantime, would he have to be on guard. >> i know joe has more for you i just want to ask you one more question -- >> sure. >> -- about china. is it microsoft or bust when it comes to tiktok? would the president be willing to entertain another buyer from

the united states coming in? >> i'm not actively involved in that negotiation that's the domain of treasury secretary mnuchin and nsa o'brien. that's a question i simply can't answer what i can tell you is this. the rationale for the policy of banning tiktok, wechat, perhaps others is simply that these are tools where they collect information that goes back to servers there. that can be used by the chinese communist party or people's liberation organization. there is a reason why the defense department ban tiktok. if you look at the panoply of dangers from the social media apps, it's surveil, monitor, track people i don't know if you remember

that old expression. it's like 9:00 in the morning, the mother and father, the chinese communist party, do you know where your children are there's that problem there's the problem of capturing your user name and password. i bet you you use the same user name and passion word for more than one account as soon as you log into tiktok they have it for your bank there's black mail extorsion there's good reason why we're banning these. what you want to do is put a firewall no pun intended between china and here >> right if of course there's evidence that they're actually doing that joe? >> oh, please, scott scott, hang on i can't let that go. that was like a little aside are you kidding me the chinese communist party, you're going to trust them even if they weren't doing it

yesterday, you damn well know they're likely to do it tomorrow the doctrine of civil fusion that came out in 2015 was one of the dumbest things the chinese party did. they announced to the world that if you're a foreign company operating on chinese soil, you got to give us all your data, okay now what's wrong with that picture? so no a sides there, scott you know these people steal from us they steal us blind and so tiktok is not an innocent tool joe. sorry. >> hey, peter, i just want to get to -- we're trying to bring back a lot of -- you know, for manufacturing pharmaceuticals, we want -- the key precursor is here i want to ask you about kodak and the $700 million government loan we got because regulators are looking into the way that worked out we spoke to kodak's executive chairman, i don't know if you saw the interview, after the day

that the news broke and there was all of the stock trading here's what he said about stock trading before the news. >> 1.684 million shares and tuesday the news came out. how do you account for that, james? any idea whether someone had wind of this we didn't see the move in the stock. that is so far and away -- that's a multiple of the daily average volume over a long period of time any idea >> obviously this has been a pretty tight kept secret we waited until the last day i couldn't tell you. >> yeah. doesn't look like a secret we want to bring it back but we don't want this stuff going on do you have any idea what went on there talking about it >> let me set the table. there's three things that go into pharmaceutical production

the key starting materials, which is a heavy chemical. most of that is in india and china. then there's -- >> we haven't got all of that. >> then the phased doses hang on, joe >> we understand all of that >> but the beauty of kodak was that it hit two points of the compass. key starting materials and active pharmaceuticals >> right right. >> we love that project right up until the point, you know, i was a business professor for 25 years at the university of california irvine, based on what i'm seeing, let's get it investigated, based on what i'm seeing, what happened at kodak was probably the dumbest decisions made by executives in corporate history. all we've done, joe. we don't know why that happened, what they did, kodak is doing an internal investigation as well we're moving forward we're not looking in the rear-view mirror i've got 30 projects on my board

across the street. kodak, i mean -- you know, i mean, it's hard to be that -- you can't fix stupid, joe. you just can't >> right okay >> you can't even anticipate that degree of stupidity. >> right you can take the professor out of the collar but the -- i don't know you were going to explain to us how the precursors worked. you gave us what we were asking about. >> i have to set it up people need to understand why a project was so -- >> we've got other guests. we've god other guests we have to go. peter, thank you we appreciate it. >> always a pleasure to talk to you, joe all right. >> okay. scott? all right, joe thank you. coming up, much more on the markets this morning as the s&p 500 sits less than 1% away from the all-time high. stay tuned you're watching "squawk box" on cnbc

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we are getting some housing data that was supposed to come out later, but it's out early. wow. a bonus, diana joins us. diana olick. >> don't you just love that, joe. >> i love it. >> home sentiment jumped 6 points to 78 on the national association of homes builders wells fargo housing business that matches the record high set back in 1998 that's going back 39 years it had plunged to 30 back in april clearly making the sharpest v-shaped recovery we've seen in this economy current sales conditions up 6 points to 84 sales expectations up three points to 78

buyer traffic up eight points to a record 65. the builders say it is all about record-low mortgage rates, people trying to get out to the suburbs and, of course, that very short supply of existing homes for sale they do have one warning, though, they say that soaring lumber prices. prices have doubled in just the last couple of months could, quote, dampen momentum on this housing recovery we have seen housing starts coming back, but not as strongly as we'd like to see. we get those numbers tomorrow morning at 8:00. builders clearly seeing buyer demand really coming back and not waning there was a question of whether it would surge for a couple months and then fall back as we got into august and september. that's not happening again with that buyer traffic number at the highest level ever and sentiment. but, again, we'll see where lumber prices and what they do to home prices, joe. >> and mortgage rates, too diane. didn't they start to go up last week is that going to continue? is that a problem? >> yeah, that's a little concern. they did jump up pretty sharply

last week and that's when fannie and freddie raised rates on lenders and we saw mortgage rates go up 25 basis points. that doesn't sound like a lot when you're coming off a record low, but that's purchasing power and when you look at prices of newly built homes, builders are raising prices and they could raise them more if their costs for lumber continue to go up and existing homes very tight supply and prices going up there. we don't want to see mortgage rates get much higher than that. they're still pretty low, though >> okay, diana, thank you. for the early read we love that scott? >> all right, joe, thank you coming up, jim cramer on a big week ahead and money and politics as the democrats get set to kick off their convention stay tuned, you're watching "squawk" right here on cnbc.

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cnbc headquarters and jim cramer joins us now. riddle wrapped in an and you listen to novarro and say he's not -- >> i'm worried about taiwan semi because we're closer to taiwan we gave them the jets. the chinoese don't try to shut down now that intel has fallen by the wayside we need to stay strong in semis and i think navarro has to stay focused on that, too it's about taiwan semi the pills. passwords. no kidding

>> they sound mad, they sound like they're mad at kodak. it's on the radar of the administration that's unbelievable, isn't it? >> kodak sometimes you get -- kodak really did a number on them. pull that deal away from kodak ill-advised by them. i want peter to focus on semi conductors because that's what i'm worried about. and i'm going to have to hit him pretty hard that he didn't go after that >> how about, just tweeting something about bioreference >> holy cow. i think that i had to go to that because of what you guys said to dr. godly. he comes back and says saliva tests and open source with yale. boom what that says is as much as sorrento is it we may be able to go into disney world and get the nfl going. imagine if the nfl took a little

saliva test before that game we'd even see the redskins on the field. can't call them that any more. what do we call washington's team scott, what do we call them now? washington's team. >> we are the washington football team. jim cramer >> i'm sorry i mentionedthat other word i'm busy doing fantasy i'm sorry. i'm doing fantasy all weekend. >> beat your eagles in week one. you'll remember who they are after week one >> i apologize for mentioning it fantasy all weekend because it is time. >> the chiefs running back out of no where. >> yeah. right. the football team. all right. >> the washington football team. i apologize, but fantasy all the fantasy sites have not changed the name they have history. they all have history. it is fantasy time, guys come on. >> it might be the d.c. football team the way we're going right now. >> fedex team.

how about fedex team i think we should call them fedex. i think fedex is going higher. union pacific team i call them fedex team >> i asked him about the nationals and the washington football team i know he loves. >> i don't want to call him the sniders. single best owner in the league. the sniders. no >> all right, bye, jim >> thanks, jim we'll see you in a few minutes >> scott, how are you doing? >> bye, jim. >> the washington monuments. >> see you in a little bit, jim. joining us now to talk about the, mat markets, anthony woodse senior trader and portfolio manager. good to see you this morning what are you going to be watching most of all this week >> great to be here, scott in terms of what we will be watching this week, of course, the fed minutes on wednesday i think that is going to be very

instructive to outline monetary policy going forward particularly we want to see if they provide any light on their inflation framework and how they expect policy to evolve going forward. >> yeah, where's the opportunity in the market now either, you know, stocks or credit >> we think that when we look at the market here, the opportunities are pervasive and corporate credit still i know we had a strong rally in credit, however, we look at the global macro economic landscape and we see an environment where policy yields are at zero across the globe, not just in the u.s. but in developed markets in general and that creates a very constructive environment in general. fiscal policy remains supportive and we have an impasse in congress currently and we expect it to be supported for credit given the pervasiveness of yield scarcity across the globe. >> yeah, speaking of where do you see yields going?

we had a nice move in the last week about 25% or so does it continue or does it run out of gas >> so, we think that if you do see a correction higher in yields, it will be led by the long end of the curve. the front end is going to remain a pinned near zero if you look at what the fed has been saying, they are telling the markets quite clearly that they're going to be on hold now and for the foreseeable future the market price for that, where we think you can see higher rates is in the long end of the curve, but we don't expect to see a material selloff here. that's not our base case >> yeah. all right. we'll talk to you soon anthony, thanks so much. joe? been fun, man, i've enjoyed it >> is this it? >> parting is such sweet sorrow. >> what about tomorrow >> i don't know. >> none of us do none of us do. >> thanks. it was great having you, scott

see you again soon good luck today on "halftime." i'll be watching "squawk on the street" is coming up next good monday morning, welcome to "squawk on the street." i'm carl quintanilla big week of retail earnings and futures are steady and oil is flat our road map begins with wall street record watch. the s&p set to open near new highs as goldman lifts its forecast postal politics as democrats call the house back and china crackdown. the white house now says it's looking at restrictions on ali baba jim, a lot to watch today. goodo